Fed Assets Rise to Record on Purchases of Treasury Securities

The Federal Reserve’s total assets rose by $15.5 billion to $2.44 trillion, the fourth record in five weeks, as the central bank bought Treasuries to expand monetary stimulus.

Treasuries held by the Fed increased by $14.9 billion to $1.03 trillion as of yesterday, according to a weekly release by the central bank today. Mortgage-backed securities held by the Fed were unchanged at $992.1 billion, while holdings of federal agency debt remained at $147.5 billion in the week ended Jan. 5.

The central bank has bought $185.6 billion in Treasuries since Nov. 12 under plans to purchase $600 billion of government debt through June and reinvest proceeds from maturing mortgage debt. The program represents the Fed’s second round of unconventional monetary easing aimed at spurring economic growth and preventing inflation from falling too low.

M2 money supply rose by $14 billion in the week ended Dec. 27, the Fed said. That left M2 growing at an annual rate of 3.3 percent for the past 52 weeks, below the target of 5 percent the Fed once set for maximum growth. The Fed no longer has a formal target.

The Fed reports two measures of the money supply each week. M1 includes all currency held by consumers and companies for spending, money held in checking accounts and travelers checks. M2, the more widely followed, adds savings and private holdings in money market.

M1 rose by $36.7 billion and over the past 52 weeks M1 has risen 7.5 percent, according to the central bank. The Fed no longer publishes figures for M3.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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